What Is Economic Impact Of Supercenters?

Audio

Aired 11/5/10

The San Diego City Council voted this week to require companies to conduct an economic impact study if they want to build a supercenter in the city. A supercenter is defined as a big-box store that has dedicated more than 90,000 square feet of floor space to non-taxable items like groceries. We discuss the ongoing debate over supercenters in San Diego.

The San Diego City Council voted this week to require companies to conduct an economic impact study if they want to build a supercenter in the city. A supercenter is defined as a big-box store that has dedicated more than 90,000 square feet of floor space to non-taxable items like groceries. We discuss the ongoing debate over supercenters in San Diego.

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The business versus labor divide vividly took center stage during the discussions over whether to allow super centers in San Diego, super centers are the size of football fields and generally offer lower priced goods. J. W, what's the dispute about regarding super centers in San Diego.

J. W. AUGUST: Depending on who you talk to, it's about helping local neighborhood businesses, or helping the poor for food for less money.

GLORIA PENNER: So one side would say, if you protect -- if you want to protect neighborhood businesses, you don't allow super centers, and the other side says, yeah, but it's cheaper for the poor to buy goods.

J. W. AUGUST: Right, and the very interesting thing you see about this, is you see the two parties flip flopping, because the Republicans want the super centers, because they talk about business and jobs, and it's a way to dig the unions. Cause wal-mart's not unionized. So they got a shot in, and say say, look at us, we're Republicans, we care about the poor. We want them to buy corn flakes for $0.10 less a box. And the Democrats and trapped because, hey these guys are nonunion, and a lot of them don't make a living wage, they end up using a lot of our services, so they find themselves on the opposite side of the fight. But it's very interesting. I -- when I -- went all over the country looking at Internet stories and newspapers and everything, before coming on, and it's amazing how this thick plays out all over the United States with the battles going on.

GLORIA PENNER: But I'm wondering issue we're talking about neighborhood stores, we think about mom and pop grocery stores, but actually super centers would also attract customers from the higher priced chain stores like Vons and raffle's. Is that not true Andrew.

ANDREW DONAHUE: Yeah, that's a great example. There was somebody who spoke at city council who said I live in Chula Vista, and I work at Vons and now we have half the people that we used to. And somebody made the comment as we were discussing that, well, is that really a small business? I think what we really -- what this boils dun to to me is is this really a ban on Wal-Mart or is this really just good planning communities? Every day make decisions on what they can and cannot -- what they do and do not want on their land, whether that be size of businesses, size of housing, how that affects their economy, how this affects environment and traffic, so this is just like any of those other decisions.

GLORIA PENNER: Bob Kittle.

BOB KITTLE: I'm afraid this is it a perfect example of the pernicious influence of labor unions in public policy. The reality is that the labor unions brought forth this proposal to try to keep Wal-Mart super centers out of San Diego. And that's because Wal-Mart super centers put tremendous pressure, because they offer goods and food at lower prices, they put tremendous pressure on the unionized grocery chains such as Vons and Albertsons. The studies that Wal-Mart has done in communities around the country show that when a Walmart opens, all of the other grocery chains lower their prices to try to be more competitive. That's exactly the way the free market should work.

J. W. AUGUST: That was the voice of it is Republican side. Now from the Democrats. The reality is, the studies are all done by Wal-Mart. Why does Wal-Mart have an issue with studying the impact it has on the community?

GLORIA PENNER: That's the condition.

J. W. AUGUST: Why not study it? Why if not? I remember us arguing about Prop D, whether it should go on the ballot or not. Let's study this thing.

GLORIA PENNER: But J. W, the city's independent auditor -- budget analyst studied the economic impact of super centers and other communities and didn't find any consistent result. So that's the point of putting that condition on?

J. W. AUGUST: Because they didn't find -- I can read that --

BOB KITTLE: No, but if they said they didn't find any consistent result, sometimes the effects were positive and sometimes they were negative. And that's a great argument for actually doing these studies. Let's take an individual look at them and see how it's gonna affect each individual neighborhood, and you know, there's very real impacts. Labor is definitely a very important and powerful constituency in this, but there's also very real impacts to mom and pop businesses. The LA times did a tremendous minpart series in 2003 the explored this, yes you do get cheaper goods and yes, people do benefit from that, but there's very real impacts to jobs, quality of life and other --

GLORIA PENNER: Wait, wait. One at a time. Bob Kittle.

BOB KITTLE: Targets one business, if doesn't require Vons or Albertsons to do this kind of study.

ANDREW DONAHUE: What about target?

BOB KITTLE: It only targets, forgive the pun, Wal-Mart, because Wal-Mart is the only company that meets the qualifications of so many thousands of square feet and so many square feet devoted to groceries and prescription drugs. Wal-mart is the only company that would have to comply with this ordinance.

ANDREW DONAHUE: They're the ones who are having this major impact.

BOB KITTLE: So it's not about land use, it would target all communities.

ANDREW DONAHUE: But Wal-Mart --

BOB KITTLE: Why are labor unions opposing Wal-Mart?

ANDREW DONAHUE: But Wal-Mart is the major player in this. This is a Wal-Mart issue. But a community has the right to decide whether they want Wal-Mart in their community.

GLORIA PENNER: Let J. W answer.

J. W. AUGUST: I'm not gonna get in this dispute. I have no interest.

GLORIA PENNER: All right. Let me ask you this, an economics study would address how many jobs would be created, how many would be displaced, a traffic study, and how these store would affect local wages and benefits. So how important is it for the San Diego City Council and the community to know this before proving super centers? J. W?

J. W. AUGUST: I say sandwich power, and transparency is important, lay it out on the table and let us look at it. Wee not all a bunch of boobs like they make us out to be. And let us work our way through the information and make a decision whether it's good for the community or not.

GLORIA PENNER: Bob Kittle?

BOB KITTLE: We're not saying if you're Marriott, and you want to open a hotel you have to do an impact to see what it might have on the mom and pop motels nearby.

ANDREW DONAHUE: But Marriott's not --

BOB KITTLE: This proposal was before the city Council by the labor unions to try to keep Wal-Mart out, and we really should not lose sight of that realty.

ANDREW DONAHUE: As long as they do these studies and actually give them a chance to exist, if they prove that they don't have a negative impact, then I think it's a good thing. If it's used as just a blanket ban, obviously it's not a good thing.

GLORIA PENNER: Okay. With that, I think we'll have to come back and talk with this about again. I want to thank J.W. August, bob Kittle, and andrew donahue, our callers and our listeners. Remember, kpbs.org slash the Editors' Roundtable. And that's what we've been, the Editors' Roundtable. On KPBS. I'm Gloria Penner.

I have mixed feelings on this issue, but there is one reality that should be addressed--large wealthy companies, like Walmart, can come into an area and sell goods at a loss until they drive out all competition. That could possibly drive out the ethnic markets that offer items that large chains don't.

That is an unfair advantage that skews the free market. Free markets rarely work well without some regulations to prevent unfair practices and monopolies.

Wow! What a great Roundtable this morning! I several times found myself talking to the radio, a little embarrassing. Anyhow on the subject of Wal-Mart, one of the commentators made a very valid point that Wal-Mart tends to drive down not just the cost of goods but also wages. Those who are very anti-government aid should think long and hard before endorsing Wal-Mart blindly. You drive down wages and provide extremely expensive healthcare plans you will see more and more people getting on government assistance programs.

And you cannot possibly believe that Wal-Mart operates as an independent in a free market. They have some of the largest political influence through lobby and political funding.

The thing is, these mom & pop stores that are supposedly being replaced don't offer much better benefits and pay than Wal Mart. Walmart actually has advantages of scale that may offer lower cost health benefits compared to the options of an employee of a mom & pop.

I think requiring the Wallmarts of the world to provide a economic analysis prior to opening a new supercenter is a great idea as long as this is a very public document. Monopolies used to be a negative in this country and we did all we could to eliminate or control them. It worked well for many years. WallMart is the sales arm of Chinese manufactures..period!!! Thats how they can sell stuff we don't need so cheap. Add on low wages, no benefits and you have their secret sause.... Low wages no benefits equal low prices is not a trueism. Americans should start to realize that low prices are not what they seem to be...they also mean low standard of living. Most of what they sell in these stores we really don't need and it's all imported from low wage countries which is not good for anyone except WallMart. Theres a reason the Walton family are some of the richest people in the world..

Great story and great information! My only constructive criticism is to screen your guests in regards to your topics. For Mr. August to say he will not comment because he has no interests is rude. I respect Mr. August, but his comment today was unprofessional.